NEW YORK — Luxury hotels continue to reap the benefit of wealthy travelers prioritizing travel, but industry experts say simply being a luxury property won't be enough to hold their demand.
During a luxury panel at the NYU International Hospitality Investment Forum, industry executives spoke about what hotel brands, owners and developers need to understand about providing guests with the experiences they want.
There has been a move post-pandemic around the world toward experiences, said Jonathan Goldstein, CEO of investment management firm Cain.
“We’re also seeing a great explosion of wealth creation in a way in which probably the world has not seen since the industrial revolution,” he said, referring in part to major IPOs coming to the market.
There is a great transfer of wealth, and when people are spending their money, they want confidence in their investments, Goldstein said. People want to go around the world and have confidence in the experience they’re going to have at their hotels. Similarly, they want the same with branded residences.
It's not that there’s no ceiling to luxury travel growth, but there is a depth to this marketplace the hospitality industry in general did not expect, he said. That depth has grown over the course of the past few years, and it is not played out.
“There is a long way to go in this process,” Goldstein said. “I think what you need is the right brand and the right real estate. It is interlocation.”
Over the past 15 years or so, the importance of food and beverage as part of the hospitality experience has grown, especially in the ultra-luxury space, said Jeff Zalaznick, managing partner at Major Food Group. It’s about how the food, the service style and the experience all work together.
“What's happened is that now we're at the point where that is at an all-time high, where now developers, hotel companies, whoever it may be, have now put a premium on the importance of the food and beverage,” he said, adding that plays into the identity of a hotel and its reputation. “It all has to work together.”
As a result, many hotels now lead with food and beverage and culinary partnerships, Zalaznick said. Major Food Group is now topping off its tower for Villa Miami, a luxury residential property that has 80 high-end luxury units along with restaurants, private clubs and a hotel.
“I think at this point, it's a package,” he said.
It’s a whole ecosystem, said Omer Acar, CEO of the Raffles and Fairmont brands at Accor. Wellness, retail, restaurants and coffee shops all work together.
“It’s not anymore the hotel-only brand,” Acar said, adding he receives calls from hotel owners about which brands to put on the street front. “It’s not one-off. It’s everything else.”
That point of curation of luxury developments is probably the most important thing that has emerged over the past few years, Goldstein said. Pointing to Zalaznick’s brands, Goldstein said they bring energy to their locations. Cain recently reopened the Delano Miami Beach, and as part of it, it brought in two Paris Society brands, Gigi Rigolatto and Mimi Kakushi.
“It’s really important to match the experience of the food-and-beverage operation with the brand,” he said.
The Delano Miami Beach features four total restaurant and bar concepts, including its Rose Bar, as well as a spa.
All of that needs to be wrapped together within a common theme of the brand, Goldstein said. In turn, that mix of inventory, attractions and experiences has to balance with the customer and price point they're trying to achieve.
"I don't think you can in any way divorce the hotel from the lifestyle," he said.
Luxury hospitality brand Aman has a different philosophy in the uniqueness and sole nature of its operations in that it doesn’t want to be a destination in the same way, he said.
“What the hotel groups need to understand is that I think developers have gotten beyond listening always to the hotel groups saying, 'This is what we need in food and beverage terms,'” he said. “It’s much more of a partnership now. It’s much more of a discussion between the hotel brands and the developers that say, ‘What are we developing? What are we curating here?’”
When working on hotel projects with owners, Accor listens to them and the developers, Acar said. It’s important to learn what their expectations are.
“It’s not sticking to one formula that everywhere we open a hotel, we’re going to have this and that, and that’s going to be it,” he said.
As long as he’s receiving calls from owners saying they’re happy, Acar knows his team is doing it correctly. One of the big parts of that is meeting their financial objectives, he said. Putting up a pro forma means delivering on the promise.
The other part is recognizing that ramping up food and beverage is different than a hotel ramp-up, he said.
“You get it right or you don’t get it right,” Acar said. “It shows immediately, and you know when you can feel it. When you start questioning what else we need to do once you open, that’s usually the issue.”